Stellantis, the world’s fourth largest automaker, will hold its EV Day on Thursday and unveil more details on its electrification strategy.
The company, formed earlier this year by the Fiat Chrysler Automobiles and Peugeot merger, already has an electric vehicle strategy, which it defined in April.
However, Bank of America BAC,
Analysts said Thursday’s event was a chance for Stellantis to better explain it to investors, adding that it could reduce the stock’s discount as well.
They noted that Stellantis STLA,
is currently trading at a discount to its peers, with a futures price / earnings (P / E) ratio of 6.5x, based on consensus earnings estimates, but 5x based on market estimates. Boa. This compares to Ford F,
and GM GM,
at 8-10x and German car manufacturers Volkswagen VOW,
and Daimler DAI,
at about 7x.
“The next EV Day is an important event, where Stellantis can explain how they aim to be an innovator rather than a legacy OEM [original equipment manufacturer], which can help reduce this discount, ”they said. Analysts maintained their buy rating on the stock with a target price of € 21, up 26% from Friday’s closing price.
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In April, the company set a target to offer an electrified version of nearly 100% of its models by 2025, expecting electric vehicle sales to account for 38% of its total sales in Europe and 31% in the United States by then. By 2030, it is targeting 70% of its total sales in Europe to be electric vehicles and 35% in the United States, with almost all of these electric vehicle sales being battery electric vehicles (BEVs).
Achieving these goals would place the company ahead of Hyundai, GM and Ford in terms of BEVs sold globally, and just behind Volkswagen, according to BoA analysts.
The group has increased its market share in Europe so far in 2021, accounting for 16.8% of new BEV registrations in the region from January to May, according to automotive analyst Matthias Schmidt. This places it second behind Volkswagen – 25.7% – and ahead of the Renault-Nissan alliance with 12.3% and Tesla with 11.5%.
BoA analysts expected Stellantis to deliver a “bullish message” on Thursday to make it clear to investors that the company would not be outdone in the electricity revolution.
“In our opinion, the only thing Stellantis has to do is put the different pieces of the puzzle together and explain a few more details about the key strategic elements (i.e. battery chemistry, cell technology , cost assumptions for the EV lineup, planning differences. between North America and Europe, capital spending, etc.), ”they said.
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Stellantis is also expected to announce plans to produce electric vans at its factory in Ellesmere Port, in the north-west of England.
The move would secure the long-term future of the plant, which currently produces Vauxhall cars, also owned by Stellantis. The investment is expected to be in the “low hundreds of millions of pounds”, the The Financial Times reported.
It would be another boost for the UK after Nissan unveiled plans to build a £ 1bn ($ 1.4bn) electric car hub in northern England last week. This includes a battery factory, a battery recycling facility and the production of a new electric model.